Tag Archives: baby boomer

An alarming number of older Americans are being forced into bankruptcy, as the rate of people 65 and older who have filed has never been higher – at three times what it was in 1991, while the rate of bankruptcies among Americans age 65 and older has more than doubled, according to anew studyby the The Bankruptcy Project.

Older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect.

The median senior filing bankruptcy enters the system $17,390 in debt, vs. an average net worth of $250,000 for their non-bankrupt peers.

According to the study, a three-decade shift of financial risk from government and employers to individuals is at fault, as aging Americans are dealing with longer waits for full Social Security benefits, 401(k) plans replacing employer-provided pensions and more out-of-pocket spending on items such as health care.

“When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give,” the study says, “and older Americans turn to what little is left of the social safety net — bankruptcy court.”

“You can manage O.K. until there is a little stumble,” said Deborah Thorne, an associate professor of sociology at the University of Idaho and an author of the study. “It doesn’t even take a big thing.”

The data gathered by the researchers is stark. From February 2013 to November 2016, there were 3.6 bankruptcy filers per 1,000 people 65 to 74; in 1991, there were 1.2.

Not only are more older people seeking relief through bankruptcy, but they also represent a widening slice of all filers: 12.2 percent of filers are now 65 or older, up from 2.1 percent in 1991.

The jump is so pronounced, the study says, that the aging of the baby boom generation cannot explain it.

Although the actual number of older people filing for bankruptcy was relatively small — about 100,000 a year during the period in question — the researchers said it signaled that there were many more people in financial distress. –NYT

“The people who show up in bankruptcy are always the tip of the iceberg,” saidRobert M. Lawless, an author of the study and a law professor at the University of Illinois.

The questionnaire asked filers what led them to seek bankruptcy protection. Much like the broader population, people 65 and older usually cited multiple factors. About three in five said unmanageable medical expenses played a role. A little more than two-thirds cited a drop in income. Nearly three-quarters put some blame on hounding by debt collectors.

The study does not delve into those underlying factors, but separate data provides some insight. The median household led by someone 65 or older had liquid savings of $60,600 in 2016, according to the Employee Benefit Research Institute, whereas the bottom 25 percent of households had saved at most $3,260. –NYT

Meanwhile, by 2013 the average Medicare beneficiary’s out-of-pocket health care expenses ate up around 41% of the average Social Security payment, according to the Kaiser Family Foundation.

Moreover, more people are entering their senior years in debt. For many, that means a mortgage – roughly 41% of senior debt in 2016, which is nearly double the 21% rate from 1989, according to the Urban Institute.

Perhaps not surprisingly, the lowest-income households led by individuals 55 or older carry the highest debt loads relative to their income. More than 13 percent of such households face debt payments that equal more than 40 percent of their income, nearly double the percentage of such families in 1991, the employee benefit institute found. –NYT

What isn’t helping is that many older parents report that helping their children contributed to their bankruptcies. Seattle bankruptcy attorney Marc Stern says he’s seen parents co-sign loans for $10,000 or $20,000 for their kids, only to find themselves on the hook when their offspring couldn’t service the debt.

“When you are living on $2,000 a month and that includes Social Security — and you have rent and savings are minuscule — it is extremely difficult to recover from something like that,” he said.

“It is not uncommon to see student loans of $100,000,” he added. “Then, you see parents who have guaranteed some of these loans. They are no longer working, and they have these student loans that are difficult if not impossible to pay or discharge in bankruptcy, and these are the kids’ loans.”

CEO of Elder Law of Michigan, Keith Morris, said that bankruptcy was a hot topic among callers to a legal hotline he established for older adults.

“They worked all of their lives, and did what they were supposed to do,” he said, “and through circumstances like a late-life divorce or a death of a spouse or having to raise grandkids, have put them in a situation where they are not able to make the bills.”

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Millennials, the largestand most significant generation for the US labor market,came of age in the era of broken central bank policies, leading to the greatest wealth, income and inequality gap in recent history. While baby boomers promised millennials the world through (expensive) college degrees, this generation discovered that massive student loans coupled with a deteriorating work environment had turned them into permanent debt and rent slaves.

And now, according to anew Axios/Survey Monkey poll, millennials are getting angry, and starting to point fingers and cast blame, with a majority accusing baby boomers of not just making things difficult for them, but, of “ruining their lives.”

The survey found 51% of millennials (18 to 34-year-olds) blame baby boomers (51 to 69-year-olds) for making a raft of poor decisions since the 1980s, that have contributed to a weak political and economic environment; only 13% said the boomers made things better. Gen Xers was not satisfied with the pesky boomers, either; as 42% of them have blamed their life’s troubles on the boomers. Most amusingly, upon self-reflection, 30% of boomers agreed that their generation’s policies had made things worse, while only 32% said they had made it better, and 34% answered it made no difference.

This new Axios/SurveyMonkey online poll was conducted April 9-13 among 4,638 adults in the United States. The modeled error estimate is 2 percentage points. Data have been weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States age 18 and over. Crosstabs availablehere. (Chart: Axios Visuals)

When asked on how to improve today’s economic and political environment, millennials had several modest proposals:

“Remove all old government officials and term limits for the House and Congress,” a 34-year-old male Republican said.

A number said “Impeach Trump” and “vote.”

“Sleep more because you will be less sensitive to negative emotions,” said a 22-year-old female Democrat.

Axios also said millennials have little confidence in their fiscal responsibility than boomers: 56 percent of millennials said they are “extremely” or “very” efficient in wealth preservation techniques, compared with 80 percent of those over 70-years old.

While the economy has entered its late-cycle phase, the dangerous rift is growing between the millennials and boomers, each wrestling for a smaller pool of jobs and shrinking government handouts. The inter-generational conflict will only escalate due to the historic accumulation of debt, and unprecedented shifts in demographics and automation, which will only accelerate into the 2020s.

But the punchline is that if Millennials loathe Boomers now when the economy is still doing relatively well thanks to a decade of central planning and trillions in liquidity, one can only imagine how delighted they will be when the next recession, or rather depression, hits.

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According to RealtyTrac’s Q3, 2015 U.S. Home Flipping Report, shows that 43,197 single family homes and condos were flipped — sold as part of an arms-length sale for the second time within a 12-month period — in the third quarter of 2015, 5.0 percent of all single family home and condo sales during the quarter.

The 5.0 percent share in the third quarter was down 7 percent from a 5.4 percent share in the second quarter but up 18 percent from a 4.3 percent share in the third quarter of 2014 — when the share of U.S. homes flipped hit the lowest quarterly level going back to the first quarter of 2000, the earliest RealtyTrac has data on flipped home

“After curtailing flipping activity last year due to slowing home price appreciation and shrinking inventory of flip-worthy homes, real estate investors have started to jump back on the flipping bandwagon in 2015,” said Daren Blomquist, vice president at RealtyTrac. “On the acquisition side, investors are finding creative ways to pinpoint potential flips in the off-market arena, and on the disposition side investors have a bigger pool of potential buyers thanks to a surge in FHA buyers this year, many of them first-time buyers looking for starter homes.”

The average gross flipping profit — the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping experts estimate typically run between 20 percent and 33 percent of the property’s after repair value) — was $62,122 for completed home flips in the third quarter. That was down slightly from an average gross flipping profit of $62,521 in the second quarter but up slightly from an average gross flipping profit of $61,781 in the third quarter of 2014.

The average gross return on investment (ROI) — the average gross profit as a percentage of the average original purchase price — was 33.8 percent for completed home flips in the third quarter, down from 34.4 percent in the previous quarter but up from 32.7 percent in the third quarter of 2014.

Best counties for flipping to millennials

Using data from the third quarter flipping report and U.S. Census demographic data, RealtyTrac identified 18 counties where the average gross return on a flipped home in the third quarter was at least 30 percent and where the millennial share of the population in 2013 (defined as those between the ages of 20 and 34 in 2013) was at least 25 percent and increased during the housing downturn between 2008 and 2013.

The top five counties for flipping to millennials were Philadelphia County, Pennsylvania, Saint Louis City, Missouri, Baltimore City, Maryland, Cumberland County, North Carolina — in the Fayetteville area — and Kings County, New York — Brooklyn. All five of these counties had average gross flipping profits in the third quarter of 63 percent or more.

Best markets for flipping to baby boomers

RealtyTrac identified 15 counties where the average gross return on a flipped home in the third quarter was at least 30 percent and where the baby boomer share of the population in 2013 (defined as those between the ages of 49 and 67 in 2013) was at least 25 percent and increased between 2008 and 2013.

The top five counties for flipping to boomers were all in Florida: Charlotte and Hernando counties in southwest Florida, and Volusia, Brevard and Marion counties in central Florida. The only counties outside of Florida on the top 15 list for flipping to boomers were Skagit County, Washington between Seattle and Vancouver; Sussex County, Delaware, on the Atlantic Coast between Washington, D.C. and Philadelphia; and Henderson County, North Carolina in the Asheville metro area.

State, metros and zip codes with highest share of flipped homes

States with highest share of home flipping as a percentage of all single family home and condo sales were Nevada (8.4 percent), Florida (7.9 percent), Alabama (7.5 percent), Arizona (6.9 percent), and Tennessee (6.6 percent).

Among 101 markets with at least 75 single family and condo flips completed in the third quarter, those with highest share of flipping were Memphis (10.5 percent), Fresno (9.5 percent), Mobile, Alabama (9.2 percent), Tampa (9.1 percent) and Deltona-Daytona Beach-Ormond Beach, Florida (9.0 percent).

Among zip codes with at least 10 single family home and condo flips completed in the third quarter, those with the highest share of flipping were 33056 in Opa Locka, Florida in the Miami metro area (30.0 percent), 38128 in Memphis (29.5 percent), 63137 in Saint Louis (28.6 percent), 33054 in Opa Locka, Florida (27.8 percent), and 44128 in Cleveland (27.5 percent).

Other zip codes in the top 20 for highest share of flipped homes included zip codes in the Baltimore, Riverside-San Bernardino, Detroit, Tampa, Phoenix, Washington, D.C., and Los Angeles metro areas.

Markets with the highest average returns on flipped homes

States with the highest average gross flipping ROI on completed property flips in the third quarter were Pennsylvania (57.2 percent), Illinois (54.0 percent), Maryland (53.6 percent), Rhode Island (48.1 percent), and Louisiana (47.9 percent). The District of Columbia also posted a high average gross flipping ROI of 55.9 percent in the third quarter

Among 101 markets with at least 75 single family and condo flips in the third quarter, those with the highest average gross flipping ROI were Pittsburgh (78.4 percent), New Orleans (73.1 percent), York, Pennsylvania (64.5 percent), Punta Gorda, Florida (61.3 percent), and Clarksville, Tennessee (59.6 percent).

Among zip codes with at least 10 completed flips in the third quarter with home price data available, those with the highest average gross flipping ROI were 21229 in Baltimore (136.0 percent) and 33063 in Tampa (130.2 percent), along with three Chicago-area zip codes: 60652 in the city of Chicago (120.4 percent), 60402 in the city of Berwyn (120.3 percent), and 60629 in the city of Chicago (115.2 percent).

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What Is Easy Money?

Easy Money is a monetary policy that increases the money supply, usually by lowering interest rates. It occurs when a country’s central bank decides to allow new cash flows into the banking system. Since interest rates are lower, it is easier for banks and lenders to loan money, thus leading to increased economic growth.

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